When consumers sign contracts they hand over certain rights to the companies issuing them. We see this all the time in the wireless industry. In exchange for a subsidy on a new phone, consumers sign two-year contracts with a carrier. This is to ensure that their monthly payments eventually cover the cost of the subsidy. In cases where the consumer wants to opt out, he or she has to pay an early termination fee. There are a few ways to get out of a contract ETF-free, the most prominent of which occurring when a carrier makes material changes to the customer agreement. AT&T did just that over the past two months, yet are not letting consumers out of their contracts. PhoneNews.com takes a look at this issue and why it’s wrong, wrong, wrong for consumers.
The first change came in February, when AT&T altered its arbitration clause to even more heavily favor the company. Consumerist has some excellent posts on the subject. It essentially boils down to waiving your right to sue the company in lieu of an arbitration hearing. The problem is that there are only so many arbitration panels, and that the company pays the fees for them. If an arbitration panel doesn’t side with a company regularly, they’ll take their business elsewhere. There is a such a clear conflict of interest here that I haven’t a clue how it’s legal.
The second change came, then went, then came back in a slightly altered form. AT&T altered the Acceptable Use Policy to restrict webcasting. It originally disallowed Slingbox viewing, but after consumer outcry it was simply limited to broadcasting rather than receiving. Still it represents a material change to the contract. It was not there before, and now it is. The FCC didn’t allow Comcast to impose such restrictions, but apparently cellular carriers are held to a different standard.
Christopher from PhoneNews suggests that users cancel their service anyway. If you’re charged an ETF, and he assures you will be, contact the BBB or the FCC. I’d personally recommend filing an FCC complaint. I’ve suggested this to many friends, and each one has received a response from the company due to the FCC pressure. In many cases the issue was resolved favorably. The idea here is to inundate the FCC with these complaints so that they take notice of the issue. Hopefully this stifles AT&T’s restrictive practices…but allowing customers out of their contracts ETF-free is a good start.
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